Analysis | US Federal Reserve divided on keeping rates flat highlighted by rare triple dissent

The consensus that Fed chair Janet Yellen has worked hard to maintain among Federal Reserve policy makers showed signs of severe strain on Wednesday.

Three members of the Federal Open Market Committee, notably including Boston Fed President Eric Rosengren, dissented when the majority of voters elected to hold interest rates steady despite strong progress this year in the labour market, expectations for higher inflation and calm in global financial markets.

“When Rosengren dissents in a hawkish direction, to me that’s news,” former Fed Vice Chairman Alan Blinder said in an interview on Bloomberg Television. “There is a great deal of division” and a three-dissent FOMC vote is “very, very unusual.”

In her press conference, Yellen acknowledged that “we struggled mightily with trying to understand one another’s point of view.”

The committee’s split marked only the fourth time since 1992 that three FOMC voters broke ranks with a majority decision. Rosengren was joined by Cleveland President Loretta Mester, who has long expressed a wariness over leaving rates low for too long, and Esther George of Kansas City, who has now dissented four times this year in favour of a rate increase.